ABSTRACT Diabetic nephropathy is a serious microvascular complication of diabetes and the main cause of end- stage renal disease. Several studies have demonstrated a critical role of inflammation in the pathogenesis of diabetic kidney disease. This inflammatory response injures the renal parenchyma and promotes a defective sodium handling that, ultimately, predispose to hypertension. Although strong evidence supports these observations, the molecular mechanisms behind the increased sodium retention of the diabetic nephron remain unknown. Research demonstrates that angiotensin-converting enzyme (ACE) is a major player in the progression of renal inflammation. Although most effects of ACE have been classically related to angiotensin II synthesis, recent studies highlight a role of ACE in inflammation and immune response through mechanisms that are independent of angiotensin II production. Indeed, ACE has two catalytically independent domains, known as the N- and C-domains, that can process a wide diversity of substrates besides angiotensin I. Preliminary data show that renal tubular epithelial cells produce interleukin-1? (IL-1?) in response to high glucose through a mechanism that requires a functional ACE N-domain and is independent of angiotensin II synthesis. This cytokine regulates the activity of renal sodium transporters. Also, in vivo studies show that diabetic mice lacking a functional ACE N-domain display lower levels of renal IL-1? and have improved sodium handling compared to wild- type diabetic mice. Based on these data, I hypothesize that, during diabetes, ACE regulates the release of IL-1? from renal tubular epithelial cells through a mechanism that is independent from angiotensin II generation. IL-1? further contributes to the inflammatory response and the impaired sodium handling associated with diabetic nephropathy. To explore this, I propose three specific aims: 1) To investigate the specific contribution of the ACE C- and N-domains to the production of IL-1? by renal epithelial cells and determine how this cytokine regulates renal sodium transporter activity in vitro. 2) To determine the mechanism by which the ACE C- and N-domains contribute to the development of kidney injury and impaired sodium handling associated with diabetic nephropathy in vivo. 3) To study the source, the cellular target and the role of IL-1? in kidney injury and impaired sodium handling associated with diabetic nephropathy. In conclusion, this proposal suggests a novel biochemical communication between different portions of the nephron where cytokines produced by epithelial cells can modify the sodium avidity along the nephron. These studies might lead to new therapeutic approaches to treat diabetic nephropathy and prevent the development of serious clinical conditions such as end-stage renal disease.